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Make the journal entries in the records of quick buck ltd

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On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600.

At this date the statement of financial position of Eldorado Ltd was as follows:

                                                    Carrying amount                     Fair value

Machinery                                   $40,000                    $67,000

Fixtures & fittings                           60,000                   68,000

Vehicles                                           35,000                    35,000

Current assets                                  10,000                       12,000

Current liabilities                               (16,000)                      (18,000)

Total net assets                                   $129,000

Share capital (80,000 shares at $1.00 per share)     $80,000

General reserve                     20,000

Retained earnings                     29,000

Total equity                         $129,000

Required:

Question 1: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition.

Reference no: EM132557235

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